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Earlier this month, Verizon Wireless began selling reports that contain data about its customers’ phone usage and browsing activity. Not surprisingly, some people are worried that this might cross the line from being simply bad business to possibly violating federal laws.

Reports issued by the new program, dubbed Precision Market Insights, can cover everything from customers’ operating system to geographic data to gender and age. And though users are anonymous, they can be given labels like “sports enthusiast, frequent diner or pet owner.”

Hanni Fakhoury, a staff attorney at the Electronic Frontier Foundation, tells CNET that disclosing the URLs visited by customers could be a violation of the Wiretap Act, which forbids carriers from divulging the contents of any communication:

“I don’t see any substantive difference between collecting content from one person and turning it over to someone, and collecting it from multiple people, aggregating that information and then turning the aggregated data over to someone else… In the end, there is still a capturing of content from the user at some point — and that’s what the potential (Wiretap Act) problem is.”

At an industry conference, a VZW exec touted the both how easy it is to acquire all this data and how much money can be made from it.
“We’re able to view just everything that they do,” he told the audience. “And that’s really where data is going today. Data is the new oil.”

He added: “We’re able to analyze what people are viewing on their handsets. If you’re at an MLB game, we can tell if you’re viewing ESPN, we can tell if you’re viewing MLB, we can tell what social networking sites you’re activating, if you’re sending out mobile usage content that’s user-generated on video.”

Verizon is committed to customer privacy and takes the issue seriously. The Precision program complies with the law and protects the privacy of our customers. The reports available through the program will not disclose the content of specific customer communications because each report will contain aggregate data from a large number of customers to protect privacy. Customers who do not want their data used as part of the program can opt-out at any time.

By updating its privacy policy and allowing for customers to opt out, some say that Verizon may successfully sidestep any allegations of wiretapping.